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Medical Accounts Receivable (MAR) Funding Process
The Application Process
Step #1 Documentation
Step #2 Documentation
The Funding Process
The Application Process
- Applicant must be electronically billing conventional third party payors excluding personal injury payors and workers compensation payors.
- After completing the initial Principle Commercial MAR Funding Application, the applicant should prepare the required information listed under Step #1.
While the list may seem extensive at first glance, most billing software can easily generate the majority of these reports.
- Our underwriting team reviews the submitted documents and sends out a Letter of Intent (LOI) quoting the daily discount fee and advance rate.
- Applicant signs the LOI and provides the additional documents listed under Step #2.
- A Principle Commercial Investor completes underwriting and sends applicant all final closing documents for signature and return.
- Account is opened upon receipt of signed closing documents and the funding process begins.
Step #1 Documentation
- A/R Aging Summary by Payor
- Business Name Verification (Articles of Inc., DBA filing, etc.)
- Medical License Verification
- Current computer generated Detailed Aging containing 1) Patient Name, 2) Procedure Code Billed, 3) Dates of Service, 4) Charges and 5) Insurance Carrier Billed
- Computer generated Closed History over the past six months reflecting:
- Name of primary carrier that was billed
- Patient name
- Date of service
- CPT code
- Amount billed
- Amount collected
- Adjustments
- Date claim was paid
Note: Please provide a legend if codes were used for adjustments. Also, use a file format with the ability to be manipulated (MS Excel preferred).
- Copies of federal, state and local payroll tax returns for the most recent two quarters (any correspondence from IRS) & supporting proof of payment
- Copies of financial statements for the most recent two fiscal or calendar years, along with any interim quarterly reports issued subsequent to close of most recent year
- A complete computerized listing of all the third party payers that you bill (names and addresses)
- Copy of your organization’s policies & procedures for billing, collecting and registration
- Copies of any significant insurance carrier contracts that are currently being used for billing, along with a complete list of expiration dates
- Copy of loss run from malpractice/liability insurance carriers
Step #2 Documentation - after returning your signed LOI form
- Bank Statements for each account for the months listed on the Letter of Intent, copies of daily deposit slips or notices of electronic transfers with corresponding copies of EOB’s attached. Please have these in chronological and itemized order with deposit slips.
- Copies of all correspondence and reports and paybacks resulting from audits, reviews, surveys or inquiries from Medicare, the fiscal intermediary, the State Department of Health, the State Department of Social Services, the Medicare Fraud Control Unit and any other state or federal agency or third party payer. Please provide complete details of any settlements, withholds paychecks, etc. that have been made or are contemplated.
The Funding Process
- Provider bills insurance claims as usual with no changes or interruption.
- Provider submits to PCC Investor, through electronic means, daily or periodic downloads for funding.
- System converts gross billing into Net Collectible Amount - funds are available to the provider within 48 hours.
- Provider requests "draw-down", or the advanced cash amount.
- A wire transfer goes into the provider's operating account less a 1% Success Fee to PCC. The Discount Fee begins to calculate based on time the receivables are outstanding.
- When claims are paid to PCC Investor lock box, the final fee is calculated and deducted from the remaining balance.
- The balance of claim value is returned to provider (reserve) less the 1% Success Fee to PCC and the final calculated Discount Fee (If managed correctly, the Discount Fee should be 2%-4%, depending on the time to payment by the carrier).
- Claims funded remain eligible for 120 days past date of service, after which provider buys them back or replaces them with other claims of equal or more value.
Do you have questions about medical accounts receivable funding?
Please Contact Us and a member of our MAR Funding Team will be in touch with you shortly.
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